2008 (7) TMI 778 - AT - Central Excise

Summary

Issues:
Refund claim for excess duty paid on import of Circular Knitting Machine, burden of proof regarding passing on duty incidence.

Analysis:
The case involved the Appellant filing a refund claim for excess duty paid on import, which was initially sanctioned by the Adjudicating Authority but later set aside by the Commissioner (Appeals) on the grounds of failure to prove that duty incidence had not been passed on to any other person.

The Appellant's representative argued that the Commissioner (Appeals) erred in considering the amount as capital expenditure, presenting a Chartered Accountant's certificate to support that the amount was debited and later credited to the imported machinery account as a refund of excess duty paid. Reference was made to a Tribunal decision to support their case. The Appellant contended that the Revenue failed to discharge the burden of proof regarding passing on duty incidence.

On the other hand, the Revenue's representative reiterated the findings of the Commissioner (Appeals), stating that the excess duty was reflected as capital expenditure in the Profit & Loss Account. They argued that the Chartered Accountant's certificates did not provide relevant information for the case.

Upon review, the Tribunal found discrepancies in the Chartered Accountant's certificates regarding how the excess amount was treated in the books of account. While one certificate indicated that the excess duty paid was not included in expenses and was debited to imported machinery, the other did not specify how the amount was shown in the books of account. The Tribunal noted that the Commissioner (Appeals) considered the excess duty as capital expenditure and expenses, contrary to the Appellant's claim of it being a capital investment. Consequently, the Tribunal held that the Appellant failed to prove that the duty incidence had not been passed on to any other person, leading to the rejection of the appeal.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeal, emphasizing the importance of proving that duty incidence was not passed on to any other party in refund claims related to excess duty payments on imports.